At that Dec 18 meeting, unitholders will be asked to vote on changing the manager given that Crown Hill, the fund’s manager and trustee, “no longer intends to manage investment funds”

For at least one unitholder of Citadel Income Fund the end of one era, which should occur next week when a special meeting is held, can’t come quickly enough. At that Dec 18 meeting, unitholders will be asked to vote on changing the manager given that Crown Hill, the fund’s manager and trustee, “no longer intends to manage investment funds.”

But thanks to the support received at an August special meeting, Crown Hill won’t walk away empty handed: it stands to receive 5% of the fund’s NAV – or more than $5-million. The manager also received about $5-million last September when unitholders were allowed to redeem as much of their stake as they wanted.

“It’s a cautionary tale,” noted the unitholder when referring to the past few years at the closed fund that have been marked by proxy fights, battles with regulators, substantial changes in redemption policies – and a lacklustre share performance, important because it trades at a discount to NAV.

Crown Hill said Wednesday the fund, “that has and will continue to be managed by Jarislowsky Fraser, has continuously maintained monthly distributions to the benefit of all unitholders. We believe the proposed changes will be of benefit to remaining unitholders done via a seamless transition.”

Thursday is the last possible date for proxies to be submitted for the meeting. According to the circular, “in order to be valid and acted upon at the Meeting, forms of proxy shall be deposited with the Fund’s transfer agent not less than 48 hours …… before the Meeting.” By his calculations, given that the meeting is slated for 9a.m. Tuesday, proxies deposited on Friday will be ineligible.

“If you count back, the last day is Thursday given that it’s difficult to do it before 9a.m. on Friday,” said the unitholder, noting if the 9am meeting is postponed or adjourned “because a quorum is not in attendance” the same meeting will be held one hour later. But that meeting doesn’t require a quorum.

Over time, Citadel Income Fund has shrunk substantially:

• Dec. 2011 – There were 29.912 million units outstanding – down from 32.163 million one year earlier.

• March 9, 2012 – When the fund completed its warrant offering (almost 90% invested), an additional 24.591 million shares, were issued, raising the float to more than 54 million.

• March 29, 2012. One month after announcing a partial redemption of up to five million units, unitholders piled in: requests for redemptions were oversubscribed – by at least five to one. All five million were redeemed for an amount equal to NAV less retraction costs

• July 2012. The fund had 45.454 million units outstanding.

• Aug. 2012. Prior to a special meeting, Citadel put forward a plan where unitholders could “voluntarily elect to receive an unlimited cash redemption of their units.” They would receive 100% of NAV less retraction costs less a fee of 5% of NAV.

Again investors piled in: about half the fund was redeemed.

But the special meeting was poorly attended: in all 5.508 million units (12.86% of the outstanding) voted on the resolutions, But 94% of the votes were cast in favor of the two key resolutions: “an unlimited redemption and amending the provisions relating to the termination and replacement of the Manager.”

• Nov. 9 2012. The fund had 23.658 million units outstanding. Next month another one million units can be redeemed by, Artemis Investment Management, the new manager provided the change receives two-thirds support.